COMMISSIONER OF INCOME-TAX AND WEALTH TAX, SIALKOT ZONE, SIALKOT VS Messrs THAPUR (PVT.), SIALKOT, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2112 (2002)

(a) Income Tax Ordinance (XXXI of 1979)---

----S.80CC---Workers' Welfare Fund Ordinance (XXXVI of 1971), S.4-- Industrial establishment covered by provisions of S.80CC, Income Tax Ordinance, 1979 is not liable to the charge of the Fund contemplated in S.4, Workers' Welfare Fund Ordinance, 1971---Charging provision of S.4, Workers' Welfare Fund Ordinance, 1971 intended the charge on the real income of the industrial concern and there is nothing in the said provision which can possibly be extended, enlarged or stretched to hold that the levy was contemplated on presumptive income as well-- Deeming provisions of S.80CC of the Income Tax Ordinance, 1979 are confined only to the kind of receipts and the assessees mentioned therein---Neither the receipts nor the assessees mentioned therein are relevant for any other purpose including the charge of Fund Industrial concern covered by provisions of S.80CC of Income Tax Ordinance, 1979 is not liable to charge of the fund---Principles.

Present one is a usual case where law has failed to keep pace with the change brought about in another law. This difficulty often arises when a legislation is made to provide for a levy with reference to the provisions of another law. There is no doubt at all that the provisions of section 4 of the Workers Welfare Fund Ordinance, 1971, as these stand today, provide for the levy with reference to a return filed under section 55 of the Income Tax Ordinance as also the total income returned by an industrial concern in such return. It is also clear that the levy is required to be based upon the income already assessed by an Assessing Officer after taking into account the amount paid by the industrial establishment under subsection (3) in respect of a particular year. In other words every industrial concern covered by the charging section 4 of the Workers Welfare Fund Ordinance, 1971 will pay the levy alongwith the return at the prescribed rate on the income declared in the return. Also, if on framing of an assessment there occurs a change in the income assessed as determined by an Assessing Officer, then under subsection (4) of section 4, of the said Ordinance the difference shall be paid by the industrial concern On or before the date specified in the order. The other subsections of section 4 also bear a clear reference to different provisions of Income fax Ordinance including the mode and time of recovery to happen in the same manner as it was a recovery of income tax leviable under the Income Tax Ordinance, 1979.

The change brought about by the presumptive tax regime has been overwhelming inasmuch as not only that second proviso to subsection (1) of section 55 of the Income Tax Ordinance, 1979 has done away with the liability of an assessee covered by section 80C or 80CC of the said Ordinance to file a return but also the other procedural requirements prescribed for returns have undergone a complete change.

The charge contemplated under section 4 of the Workers Welfare Fund Ordinance, 1971 pas not undergone any change end is, therefore, still a valid levy however, there is no answer to the contention put forth by the assessees that the charge is leviable only with reference to the income returned by an assessee and then determined by an Assessing Officer in accordance with the provisions of the income Tax Ordinance. The presumptive tax regime having done away with the concept of assessment of "total income" of an assessee, the levy contemplated in section 4 of the W.W.F. has necessarily faltered away in respect of the assessees covered by such regime. In matters of taxation a literal approach, if it does not lead to a manifest absurdity, has to be followed. In income-tax law, the words "total income" as well as "assessment" have their peculiar meanings.

The word "assessment" meant not merely the computation of the income of the assessee but also the determination of the tax payable by him.

There are three well-known stages of imposition of tax, namely, (a) liability to pay tax, (b) computation of tax payable and (c) recovery of tax. Every order which contemplated computation of income or determination of the amount of tax payable was not an order of assessment within the meaning of late Income-tax Act, 1922.

The word "assessment" normally connoted the entire process commencing from the submission of the return till the determination of tax liability.

The word "total income" me.4nt total income computed.

An income in order to come within the purview of definition must satisfy-two conditions. Firstly, it must comprise the total amount of income, profits and gains referred to in section 4(1) of the Income-tax Act, 1922. Secondly, it must, be "computed in the manner laid down in the statute. If either of these conditions failed, the income will not .be part of the total income that can be brought to charge. It will be noted that the word "income" and "total income" as defined respectively in section 2(24) and section 2(44) of the Income Tax Ordinance bear almost the same meaning assigned to them under the late Act; 1922. Therefore, meanings assigned under late Act, 1922 were attracted to understand their meaning in the context of the Income Tax Ordinance, 1979 as well.

The difficulty simply remains that the basic form and the meaning in which the levy was required to be computed has completely vanished in respect of a certain class of assessees due to introduction of presumptive tax regime. To the extent of that class there is no basis whatsoever to compute the total income and then to charge the levy equal to 2% of such total income. It will also be noted that the. Fund is charged at 2% of the total income of an Industrial Concern. In presumptive tax regime the receipts are deemed to be total 'income and subjected to tax at a particular rate. Now, if all receipts are taken as total income and subjected to a rate of 2% thereupon the charge will be excessive and disproportionate to the purpose for which it has been levied. Secondly, the deeming provisions of section 80CC cannot be read into Workers' Welfare Fund Ordinance to convert a simple receipt into total income to form basis for computation of the charge. Deeming provisions in a statute cannot spill over to other provisions in a statute and are to be construed strictly within the four corners of their objects. The deeming provisions of section 80CC, therefore, are confined only to the kind of receipts and the assessees mentioned therein. Neither the receipts nor the assessees mentioned therein are relevant for any other purpose including the charge of the Fund.

The working back of income as has been done in these cases was possible only under subsection (5) of section 80C and that such working back of income is not permissible under any of the provisions of section 80CC. Working back of income under section 80CC(5) is only for the purpose of determination of share of a partner of a firm and nothing else. Contention that by working back such income the imposition of levy at the rate of 2% thereof is otherwise illegal as it does not allow the amount also-charged as an expense, is also formidable. Subsection (7) of section 4 of Workers' Welfare Fund Ordinance allows -the payment made by an industrial establishment to the Fund to be treated as an expense for the purpose of assessment of income-tax. However, in cases covered by section 80CC since no assessment is made the question of allowing of such payment as an expense does not arise at all. The provisions of section.80CC .are clear that where any amount referred to under various subsections of section 50 has been received by a person the whole of such amount is to be deemed the income of that person and tax thereon is charged at the rates specified in the First Schedule. Subsection (2) of section 80CC creates a bar to claim or to authorize any allowance or deductions against the income so presumed. Under subsection (3), the tax so deducted is deemed to be the final discharge of the tax liability of the person covered by these provisions and he "shall not be required to file the return of total income under section 55": Subsections (4) and (5) of section 80CC allow working back of income where an assessee seeks to explain the nature and source of any investment etc. on the basis of income determined under these provi sions while under subsection (5) working back of the income is permis sible only for the purpose of determining the share of a partner of a firm.

Introduction of presumptive tax regime through section 80CC and other similar provisions have not rendered invalid the charging provisions of section 4 of Workers' Welfare Fund Ordinance in any manner. However an income presumed to have been accrued to an assessee can neither be taken to be his total income nor the same can be said to have been assessed or assessable under the provisions of the Income Tax Ordinance, 1979. The basis for computation of the Fund has vanished and with such change the levy of the Fund in case of class of assessees covered by section 80CC is no more possible. The prayer of the Revenue for a liberal construction of the provisions of section 80CC read with section 4 of the Workers' Welfare Fund Ordinance if granted in the manner it is being sought, a number of blanks will have to be filled in and many deficiencies supplied to justify computation of the Fund. It is not for the Courts to supply for deficiency in the language of law as framed. Where law expressly holds out to an assessee that in case of particular receipts the deduction made at source in respect thereof shall be his final discharge of liability under the Income Tax Ordinance, any further charge with reference to the provisions contained in another legislation cannot justify a further charge. Even by employing the most liberal rules of construction of machinery provisions one cannot support the working back of presumptive income by the Assessing Officer and then its subject to charge of Workers' Welfare Fund. The .provisions of section 4 of Workers' Welfare Fund lay out the stage at which the levy of the Fund has to be made. It is firstly at the time of filing of a return and in case of any change in the income returned and the income assessed, at the time when the income is assessed although subsection (4) of section 4 further contemplates that an order for levy of Fund can be made after an assessment has been framed yet the reference still remains to the framing of an assessment. There is no other incident or stage to which the levy of the Fund cats be linked. In order to grant the prayer of the Revenue not only the Court will have to lay down a rule which would amount to legislate but also a number of lacunas will have to be supplied.

The charging provisions of section 4 of Workers' Welfare Fund Ordinance and those of presumptive tax regime under section 80CC cannot be reconciled or be interpreted in a way to justify a charge. The charge necessarily bears a reference to and follows pattern of a regular assessment framed on observation of usual formalities and following computation of income keeping in view the different provisions of the Income Tax Ordinance. Since that does not happen in cases covered by section 80CC, the charge and computation of Fund in such cases is neither legally justified nor otherwise possible. The charging provisions of section 4 of Workers' Welfare Fund Ordinance are clear that the Legislature intended the charge on the real income of an industrial concern. There is nothing in these provisions which can possibly be extended, enlarged or stretched to hold that the levy was contemplated on presumptive income as well.

An industrial establishment covered by provisions of section 80CC of the Income Tax Ordinance, 1979 is not liable to the charge of the Fund contemplated in section 4 of the Workers Welfare Fund Ordinance, 1971.

Abdul Rashid v. The State PLD 1957 (W.P.) Lah. 400; Haji Abdul Karim v. The State PLD 1959 Lah. 833; Messrs Leather Connections Private Limited v. The Central Board of Revenue 2000 PTD 3369; Lt.-Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty PLD 1961 SC 119; Commissioner of Income-tax, West Bengal-III v. Balkrishna Malhotra (1971) 81 ITR 759; Commissioner of Income-tax, West Bengal v. Blackwood Hodge (India) (P.) Ltd. (1971) 81 ITR 807; Commissioner of, Income-tax, Madras (Central) v. M.D. Georgopoules (1980) 125 ITR 630; Commissioner of Income-tax, Kerala v. Batpathe (1972) 83 ITR 823; Commissioner of Income-tax (Central), Delhi v. Harprashad & Co. (P.) Ltd. (1975) 99 ITR 118; Commissioner of Income-tax/Wealth Tax, Multan Zone, Multan v. Allah Yar Cotton Ginning & Pressing Mills (Pvt.) Ltd. 2000 PTD 2958; I.T.A. No.59 of 1998 and Viswanathan Chettiar v. Commissioner of Income-tax (1954) 25 ITR 79 ref.

(b) Interpretation of statutes---

---- Fiscal statute---Literal approach, unless it leads to a manifest absurdity, has to be followed.

(c) Interpretation of statutes---

---- Fiscal statute---Machinery provision in a taxing statute to be liberally construed in order to effect recovery.

(d) Interpretation of statutes---

---- Deeming provisions---Such provisions in a statute cannot spill over to other provisions in a statute and are to be construed strictly within the four corners of their objects.

(e) Interpretation of statutes---

---- Deficiency in the language

of law---Court cannot supply such deficiency.

(f) Income Tax Ordinance (XXXI of 1979)---

----S.5(b)---Workers' Welfare Fund Ordinance (XXXVI of 1971), S.4-- Fund being a juristic person, .the Commissioner of Income-tax merely being an agent to collect the same, could not independently maintain an action before these forums.

(g) Income Tax Ordinance (XXXI of 1979)---

----S.136(1) [since amended]---Appellate jurisdiction of High Court-- Scope---Provision of S.136(1), Income Tax Ordinance, 1979 [since amended] is confined to a question of law arising out of an order of the Tribunal---Tribunal having framed a question for the consideration of High Court without an objection from the assessee, High Court declined to take up the same for a decision.

Muhammad Ilyas Khan, Mian Yusuf Umar and Rana Munir Hussain for Appellant (in I.T.A. 716 of 2000).

Syed Ibrar Hussain Naqvi, Zia Haider Rizvi, Latif Ahmad Qureshi, Sh. Muhammad Ilyas, Jan Muhammad, Muhammad Shahid Abbas, Munawar Ahmad Warraich, Qazi Habib-ur-Rehman Zubari, Mian Muhammad Jameel, Aurangzeb Mirza and Siraj-ud-Din Khalid for Respondents.

Date of hearing: 6th December, 2001.

JUDGMENT

NASEEM SIKANDAR, J.--The Workers Welfare Fund Ordinance, 1971 (for short the W.W.F. Ordinance) was promulgated on 9th December, 1971. The purpose of the Ordinance was stated to provide for the establishment of a Workers' Welfare Fund for providing residential accommodation and other facilities to industrial workers. It required every industrial establishment the total income whereof was not less than Rs.1,00,000 in any year of accounting, to pay to the Fund a sum equal to 2 6 of the total income as was assessable under the Income Tax Ordinance, 1922 or would have been so assessable but for the exemptions provided under section 15BB of that Act. Likewise, in subsections (3), (4) and (9) of section 4 of the W.W. Ordinance a reference was made to the total income reported in a return filed by an assessee under subsection (1) of section 22 and the assessment finally framed under section 23 of the late Income-tax Act, 1922.

2. Almost two years after the promulgation of the Income Tax ordinance, 1979 (for short the Ordinance) from first of July, 1979 the foresaid subsections of section 4 of the W.W.F. Ordinance were mended by Federal Laws (Revision and Declaration) Ordinance, 1981 substitute the word "Act" with Income Tax Ordinance, 1979 wherever mentioned in the W.W.F. Ordinance. Also corresponding sections of income Tax Ordinance. Also corresponding sections of Income Tax ordinance providing for filing of returns and framing of assessments were substituted for similar, provisions of the late Income-tax Act, 1922. The relevant provisions of section 4 of the W.W.F. Ordinance as these stood after such substitutions and even thereafter till today, read as

Section 4. Model of payment by and recovery from, industrial establishments. ---(1) Every industrial establishment, the total income of which in any year of account commencing on or after the date specified by the Federal Government in the Official Gazette in this behalf is not less than one lakh of rupees shall pay to the Fund in respect of that year a sum equal to two per cent., of so much of its total income as is assessable under the (Ordinance) or would have been so assessable but for the exemptions made by section 48 thereof.

(2) Every industrial establishment which is liable under sub section (1) shall pay the amount due from it to the Income-tax Officer having jurisdiction over the industrial establishment for purposes of the Ordinance.

(3) The industrial establishment shall, on or before the date on which it is required to furnish a return of income under section 55 of the Ordinance pay the amount due from it under subsection (1) calculated with reference to the total income reported in the said return.

(4) At the time of making an assessment under the Ordinance or as soon thereafter as may be, the Income-tax Officer shall by order in writing, determine the amount due from industrial establishment under subsection (1) if any on the basis of the income so assessed after taking into account the amount paid by the industrial establishment under subsection (3) in respect of the year and the industrial establishment shall pay the amount so determined on or before the date specified in the order.

(5) Any change by way of enhancement or reduction in the assessed income subsequent to the assessment made under the Ordinance shall be given effect to by adjustment of the amount due under subsection (1).

(6) Any amount paid by an industrial establishment under sub-section (3) which .is found on the basis of an order in appeal or revision under the Ordinance to have been paid in excess shall be refunded to it by the Income-tax Officer.

(7) The payment made by an industrial establishment to the Fund under subsection (1) shall be treated as an expenditure .for purpose of assessment of income-tax.

(8) Where any industrial establishment fails to pay the amount due from it as required under this section, it shall without prejudice to any other liability to which it may be subject under this Ordinance or any, other law, be liable to pay an additional amount equal to eight percent. per annum of the amount due from it from the date on which it was originally payable to the date on which it is paid.

(9) The provisions of the Ordinance relating to the mode and time of recovery of the income-tax leviable under the Act shall, so far as may apply to the recovery of the amount due under sub section (1). (Emphasis supplied).

3. Since the year, 1981 when the above substitutions were made the things appear to have gone smoothly. However, that smooth sail came to an end when presumptive tax regime was introduced in -the Income Tax Ordinance, 1979 in the year 1991. Through various Finance Acts starting, from the year 1991 sections 80B, 80BB, 80C, 80CC, 90CD and 80D were inserted to have effect from different assessment years. The hammer of the new regime fell squarely on the orthodox concept of filing of returns and framing of assessments after computing the income of an assessee allowing or disallowing claimed deductions and expenses. For the purpose of levy of the fund most relevant provision of the Presump tive Tax Regime appear to be section 80CC which provides for "Tax on income of certain exporters". It was inserted in the Income Tax Ordi nance-in 1992 but partly amended in the year 1993 and reads as under:---

80-CC. Tax on income of certain exporters. ---(1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any amount referred to in subsection (5A) or subsection (5AA) of section 50 is received by any person, the whole of such amount shall be deemed to be the income of the said person and tax thereon shall be charged at the rates specified in the First Schedule.

(2) Nothing contained in this Ordinance shall be so construed as to authorise any allowance or deduction against the income as determined under subsection (1) or any refund of tax deducted under subsection-(5A) of section 50 or set off of any loss under any provision of this Ordinance.

(3) Where the assessee has no income other than the income referred to in subsection (1) in respect of which tax has been deducted under subsection (5A) of section 50, the tax so deducted, shall be deemed to be the final discharge of his tax liability under this Ordinance and he shall not be required to file the return of total income under section 55.

(4) Where an assessee while explaining the nature and source of any sum, investment, money valuable article, excess amount or expenditure, referred to in section 13, takes into account any source of income which is subject to tax in accordance with the provisions of this section, he shall not be entitled to credit of any sum as is in excess of an income chargeable to tax under this section, would have resulted in tax liability equal to the tax payable in respect of income under this section.

(5) For the purpose of determining the share of a partner of a firm out of such income of the firm as is determined under this section, the income of the firm shall be taken to be an amount which if taxed at the rate or rates, other than the rate applicable to income chargeable to tax under this section, would have resulted in tax liability equal to the tax payable in respect of income under this section.

(6) In a case to which subsection (3) applies, an order under section 59A shall be deemed to have been made in respect of income referred to in subsection (1).

4. The issue, which emerges after the introduction of presumptive tax regime including section 80-CC is that where neither a return is filed nor an assessment is framed how the W. W. F. shall be charged which necessarily has a reference to the filing of return under section 55 of the Ordinance as also the framing of assessment under the Ordinance. It needs to be noted at the very outset that no one is questioning legality of the levy under the charging provisions of section 4 of W. W. F. Ordinance.

5. The respondents/assessees in these petitions, by and large, are manufactures and exporters of sports goods. Their income is admittedly covered under the provisions of section 80CC of the Income Tax Ordinance, 1979. All of them filed statements under section 143-B of the Income Tax Ordinance, 1979 declaring their presumptive incomes. The Assessing Officer on the basis of these statements proceed to compute imputable income and then to charge W. W. F. at the prescribed rate of 2% on their incomes so worked back.

6. The respondents failed in first appeal but succeeded before the Tribunal. It appears that the Income-tax Appellate Tribunal constituted a larger Bench to consider the issue and finally concluded that in cases of manufacturers/exporter s covered by section 80CC where only a statement under section 143-B had been filed, the provisions of W.W.F Ordinance were not attracted.

7. Thereafter, the Revenue made a prayer for a reference under section 136(1) of the Income Tax Ordinance, 1979 and was obliged by the Tribunal, During the period when reference provisions of section 136 were substituted by appeal provisions the Revenue has approached this Court in appeal. In both situations, however, the question to be considered and answered remains the same. It is as follows:---

"Whether an industrial establishment covered under sec tion 80CC of the Income Tax Ordinance, 1979 is not liable to charge under section 4 of the Workers Welfare Fund Ordinance, 1971."

8. Heard the learned counsel for the Revenue represented by Mr. Muhammad Ilyas Khan, Mian Yousaf Umar and Rana Munir Hussain, Advocates. The respondents/assessees are represented by Syed Ibrar Hussain Naqvi, Mr. .Zia Haider Rizvi, Mr. Latif Ahmad Qureshi, Sh. Muhammad Ryas, Mr. Jan Muhammad, Mr. Aurangzeb Mirza, Mr. Muhammad Shahid Abbas, Mr. Munawar Ahmad Warraich, Qari Habib-ur-Rehman Zubari, Mian Muhammad Jameel and Khawa'a Muhammad Iqbal, Advocates.

9. It is the case of the Revenue that charging provisions of section 4 of the W.W.F. Ordinance cannot be ignored or deemed impliedly repealed for the mere reason of inserting of the above noted provisions including section 80CC of the Income Tax Ordinance, 1979 enforcing presumptive tax regime. Such an interpretation according to the learned counsel for the Revenue is against the rule of interpretation settled by this Court in re: Abdul Rashid v. The State PLD 1957 (W.P.) Lahore 400) and re: Haji Abdul Karim v. The State PLD 1959 Lah. 833. Also claim that despite introduction of that regime in the Income Tax Ordinance an industrial concern covered by the charging provisions of .W.W.F. Ordinance remains "assessable" under the Income Tax Ordinance and that the statement filed under section 135B of that Ordinance may very well be treated to be a return of income under that Ordinance. Further that W.W.F. is a levy on income which every respondent/assessee declared from an industrial concern and on which they paid income-tax. Therefore, according to the Revenue they cannot be allowed to avoid the levy on the basis of far-fetched technicalities. It is also stated that the levy of charge of W. W. F. being not denied by the assessees-respondents, the machinery provisions of various subsections of section 4 of the W.W.F. Ordinance should be interpreted in a manner to advance recovery. Reliance in that respect is placed upon re: Messrs Leather Connections Private Limited v. The Central Board of Revenue 2000 PTD 3369 in which it was inter alia held by a Single Bench of this Court that machinery provisions of a fiscal statute should be interpreted in a manner that recovery is not frustrated nor adversely affected. Learned counsel for the Revenue also refer to the case of Lt.-Col Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty PLD 1961 SC 119 to reiterate the principle that the imposition of tax is to be strictly construed in favour of a subject while machinery provisions are to be liberally construed. Next contend that the intention of the Legislature needs to be given full respect and effect which, without a doubt wants a charge for the welfare of workers of industrial concerns words "as is assessable under the Ordinance or would have been so assessable" as used in subsection (1) of section 4 of the W.W.F. Ordinance specifically cover the presumptive income under section 80CC which in fact is one of the several deeming provisions of the Income tax Ordinance.

10. On the other hand, it is the case of the respondents- assessees that despite presence of the charging provisions of section 4 of the W.W.F. Ordinance, the manner in which the charge has to be computed under subsections (1) to (5) thereof having evaporated under the presumptive tax regime, no legal recovery on that count can possibly be made. In support of the submission they refer to the phrases "total .income", "so much of the total income as is assessable "or would have peen so assessable" as is used in subsection (1) of section 4 of the W.W.F. Ordinance. It is stated that levy or charge of the Fund is' intrinsically linked with total income which 'is assessed or is assessable under the provisions of Income Tax Ordinance. According to the learned counsel representing the assessees where such basis for computation has been lost, the levy itself is lost. To further strengthen the arguments learned counsel refer to the words and phrases "return of income under section 55 of the Ordinance" and "reported in the said return" in subsection (3) and "At the time of making an assessment" and "on the basis of the income so assessed" in subsection (4) of section 4 of the W.W.F. Ordinance. The provisions of subsections (5) and (6) are also referred to where income or deemed income has been directed to be made basis for refund of the fund already charged or its further levy in account of a change in the assessed amount as a result of revision .or appeal proceedings under the Income Tax Ordinance. Subsection (7) of section 4 is also referred to in which every payment made to the Fund is allowed to be treated as an expense for the purpose of assessment of income-tax'. Their next claim is that as per provisions of subsection (9) of section 4 of the W.W.F. Ordinance only certain specific provisions relating to recovery of income-tax have been made applicable to the levy under the W. W. F. Ordinance and none else.

11. From the definition of the word "total income" under section 2(44) of the Income Tax Ordinance, 1979, the word "assessment" and "assessable" as used in both Ordinances it is argued that the Fund is chargeable only on total income which has normally been assessed under the Income Tax Ordinance and that no charge except on a regular assessment is either permissible or is competent under the law. It is also stated that every order made under the Income Tax Ordinance is not an assessment order and that the concept of total income has to be understood and interpreted in the light of the charging provisions of section 9 of the Income Tax Ordinance. The total income under the Ordinance, it is submitted, has to be computed in the manner given in the Ordinance and where it is not possible for any legal or procedural requirement as in the present case the charge of the fund is legally and factually not possible. The procedure to file a return under section 55 and the second proviso to that section is also referred to which exempts persons/assessees from filing of returns if covered by the presumptive tax regime. On the basis of that provision it is stated that a statement under section 143-B submitted by these exempt persons/asses sees cannot be treated as a return of income from which they had expressly been exempted. The use of non obstante expression in section 80-CC is also referred to claim that these provisions override ail provisions relevant for the computation and assessment of income under the Ordinance. It is pleaded that income covered under section 80-CC is neither "total income" of an assessee nor it is "assessable" under the Income Tax Ordinance. Further, it is pointed out that provisions relating to assessment are treated under different Chapter VII (sections 55 to 67) and have nothing to do with other chapters including chapter VIII relating to tax liability in special cases (sections 68 to 84) wherein provisions of presumptive tax regime fall. Further that without framing of a regular assessment W.W.F. cannot be allowed as an expense and if the charge is computed without such allowance as has been done in the present cases the Revenue will deny the assessee a concession conceded to it by law i.e. section 4(7) of the W.W.F, Ordinance.

12. In support of the arguments as to what amounts to an assessment, that an assessment is possible only where total income of assessee and not mere "income" is computed and assessed and that total income may be assessed only in the manner prescribed under the law learned counsel representing the respondents/assessees have relied upon re: Commissioner of Income-tax; West Bengal-III v. Balkrishna Malhotra (1971) 81 ITR 759, re: Commissioner of Income-tax, West Bengal v. Blackwood Hodge (India) (P.) Ltd. (1971) 81 ITR 807, re Commissioner of Income-tax, Madras (Central) v. M.D. Georgopoulea (1980) 125 ITR 630, re: Commissioner of Income-tax, Kerala v. Batpathe (1972) 83 ITR 823 and re: Commissioner of Income-tax (Central), Delhi v. Harprashad & Co. (P.) Ltd. (1975) 99 ITR 118. A reference is also made to certain observations made by one of us (Naseem Sikandar, J.), in re: Commissioner of Income-tax/Wealth Tax, Multan Zone, Multan v. Allah Yar Cotton Ginning & Pressing Mills (Pvt.) Ltd. 2000 PTD 2958.

13. On merits, lastly the assessees/respondents rely on a recent judgment of the Karachi High Court delivered on 28-8-2001 in I.T.A. No.59 of 1998 and many other identical appeals. Through that order a Division Bench of that Court answered in the negative the question if W.W.F. is leviable on the income subjected to presumptive tax regime and covered by sections 80-C and 80-CC of the Income Tax Ordinance.

14. At the fag end of their arguments learned counsel for the respondents/assessees have raised two legal objections. First that no appeal against levy of W.W.F. before the Commissioner of Income-tax Appeals or the Tribunal being competent their entertainment by these forums was not in accordance with law nor in the given situation a question of law can be said to have arisen out of the order of the Tribunal. Secondly, that the Fund constituted under section 3 of the W.W.F. Ordinance itself being a legal person under section 11-B of that Ordinance, inserted in the year 1974, the Revenue represented by Zonal Commissioner of Income-tax could not be a party either before the Tribunal under section 134 or before this Court under section 136 of the Income Tax Ordinance.

15. After considering the arguments from both sides we have concluded that it is a usual case where law has failed to keep pace with the change brought about in another law. This difficulty often arises when a legislation is made to provide for a levy with reference to the provisions of another law. There is no doubt at all that the provisions of section 4 as these stand today, provide for the levy with reference to a return filed under section 55 of the Income Tax Ordinance as also the total income returned by an industrial concern in such return. It is also, clear that the levy is required to be based upon the income already assessed by an Assessing Officer after taking into account the amount paid by the industrial establishment under subsection (3) in respect of a particular year. In other words every industrial concern covered by the charging section 4 will pay the levy alongwith the return at the prescribed rate on the income declared in the return. Also, if on framing of an assessment there occurs a change in the income assessed as determined by an Assessing Officer, then under subsection (4) of section 4, the difference shall be paid by the industrial concern on or before the date specified in the order. The other subsections of section 4 also bear a clear reference to different provisions of Income Tax Ordinance including the mode and time of recovery to happen in the same manner as it was a recovery of income-tax leviable under the Income Tax Ordinance, 1979.

16. The change brought about by the presumptive tax regime has been overwhelming inasmuch as not only that second proviso to subsection (1) of section 55 has done away with the liability of an assessee covered by section 80C or 80CC to file a return but also the other procedural requirements prescribed for returns have undergone a complete change.

17. Learned counsel for the Revenue are correct only to the extent that the charge contemplated under section 4 of the Workers' Welfare Fund Ordinance, 1971 has not undergone any change and is, therefore, still a valid levy. However, there is no answer to the contention put forth by the assessees that the charge is leviable only with reference to the income returned by an assessee and then determined by an Assessing Officer in accordance with the provisions of the Income Tax Ordinance. The presumptive tax regime having done away with the concept of assessment of "total income" of an assessee, the levy contemplated in section 4 of the W.W.F. has necessarily faltered away in respect of the assessees covered by such regime. In matters of taxation a literal approach, if it does not lead to a manifest absurdity, has to be followed. In income-tax law, the words "total income" as well as "assessment" have their peculiar meanings. In re: C.I.T., West Bengal-III v. Balkrishna Malhotra (1971) 81 ITR 759, their Lordships of the Supreme Court of India observed that since the judgment of Madras High Court in Viswanathan Chettiar v. Commissioner of Income-tax (1954) 25 ITR 79 no other High Court in India had interpreted the word "assessment" as used in the proviso to section 34(3) of the late Act in a different way. The Madras High Court in that judgment had concluded that the word "assessment" meant not merely the computation of the income of the assessee but also the determination of the tax payable by him. In re: Commissioner of Income-tax, West Bengal v. Blackwood Hedge (India) (P.) Ltd. (19.71) 81 ITR 807, the Calcutta High Court re-counted the three well-known stages of imposition of tax, namely, (a) liability to pay tax, (b) computation of tax payable and (c) recovery of tax. It was accordingly observed that every order which contemplated computation of income or determination of the amount of tax payable was not art order of assessment within the meaning of late Income-tax Act, 1922. In the next case relied upon by Mr. Ibrar Hussain Naqvi, Advocate, re: C.I.T., Madras (Central) v. N.D. Georgopoules (1980) 125 ITR 630 the Madras High Court expressed the view that the word "assessment" normally connoted the entire process commencing from the submission ID of the return till the determination of tax liability. In re: C.I.T., Kerala v. Datpathe (1972) 83 ITR 823, it was found that the word "total income" used in sections 66 and 110 of the Indian Income Tax Act, 1961 meant total income computed as envisaged by these sections and in accordance with the other provisions of the Act. The Supreme Court of India in re: C.I.T. (Central), Delhi v. Harprashad & Co. (P.) Ltd. (1975) 99 ITR 118 was consider in the definition of the word "income" as well as "total income" as used in various provisions of the late Income-tax Act, 1922. Their Lordships finally concluded that an income in order to come within the purview of definition must satisfy two conditions. Firstly, it must comprise the total amount of income, profits and gains referred to in section 4(1) of the Act. Secondly, it must be "computed in the manner laid down in the Act". "In the view of their Lordships if either of these conditions failed, the income will not be part of the total income that can be brought to charge. It will be noted that the words "income" and "total income" as defined respectively in section 2(24) and section 2(44) of the Income Tax Ordinance bear almost the same meaning assigned to them under the late Act, 1922. Therefore, the ratio settled in the aforesaid judgments is clearly attracted to understand their meaning in the context of the Income Tax Ordinance as well.

18. Learned counsel for the Revenue are perfectly correct in relying upon the aforesaid judgments to claim that machinery provisions in a taxing statute should be liberally construed in. order to effect recovery. However, as noted earlier, it is not a matter of mere interpretation of certain provisions of the Ordinance referred to in section 4 of the W. W. F. Ordinance.

19. The difficulty simply remains that the basic form and the meaning in which the levy was required to be computed has completely vanished in respect of a certain class of assessees due to introduction of presumptive tax regime. To the extent of that class there is no basis whatsoever to compute the total' income and then to charge the levy equal to 2% of such total income. It will also be noted that the Fund is charged at 2% of the total income of an Industrial Concern. In presumptive tax regime the receipts are deemed to be total income and subjected to tax at a particular rate. Now, if all receipts are taken as total income and subjected to a rate of 2% thereupon the charge will be excessive and disproportionate to the purpose for which it has been levied. Secondly, the deeming provisions of section 80CC cannot be read into Workers' Welfare Fund Ordinance to convert a simple receipt into total income to form basis for computation of the charge. It is settled law that deeming provisions in a statute cannot spill over to other provisions in a statute and are to be construed strictly within the four corners of their objects. The deeming provisions of section 80CC, therefore, are confined only to w the kind of receipts and the assessees mentioned therein. Neither the receipts nor the assessees mentioned therein are relevant for any other purpose including the charge of the Fund.

20. Learned counsel for the assessees are also correct in saying that the working back of income as has been done in these cases was possible only under subsection (5) of section 80C and that such working back of income is not permissible under any of the provisions of section 80CC. It is pointed out that working back of income under section 80CC(5) is only for the purpose of determination of share of a partner of a firm and nothing else. Their contention that by working back such income the imposition of levy at the rate of 2% thereof is otherwise illegal as it does not allow the amount also charged as an expense is also formidable. As noted earlier, subsection (7) of section 4 of Workers' Welfare Fund Ordinance allows the payment made by an industrial establishment to the Fund to be treated as an expense for the purpose of assessment of income-tax. However, in cases covered by section 80CC since no assessment is made the question of allowing of such payment as an expense does not arise at all. The provisions of section 80CC are clear that where any amount referred to under various subsections of section 50 has been received by a person the whole of such amount is to be deemed the income of that person and tax thereof is charged at the rates specified in the First Schedule. Subsection (2) of section 80CC creates a bar to claim or to authorize any allowance or deductions against the income so .presumed. Under subsection (3), the tax so deducted is deemed to be the final discharge of the tax liability of the person covered by these provisions and he "shall not be required to file the return of total income under section 55". Subsections (4) and (5) of section 80CC allow working back of income where an assessee seeks to explain the -nature and source of any investment etc. on the basis of income determined under these provisions while under subsection (5) working back of the income is permissible only for the purpose of determining the share of a partner of a firm.

21. It is correct that introduction of presumptive tax regime through section 80CC and other similar provisions has not rendered invalid the charging provisions of section 4 of Workers' Welfare Fund Ordinance in any manner. However, as noted earlier, an income presumed to have been accrued to an assessee can neither be taken to be his total income nor the same can be said to have been assessed or assessable under the provisions of the Income Tax Ordinance, 1979. The basis for computation of the fund has vanished and with such change the levy of the fund in case of class of assessees covered by section 80CC is no more possible. The prayer of the Revenue for a liberal construction of the provisions of section 80CC read with section 4 of the Workers' Welfare Fund Ordinance if granted in the manner it is being sought, a number of blanks will have to be filled in and many deficiencies supplied to justify computation of the fund. It is not for the Courts to supply for deficiency in the language of law as framed. Where law expressly holds out to an assessee that in case of particular receipts the deduction made at source in respect thereof shall be his final discharge of liability under the Income Tax Ordinance, any further charge with reference to the provisions contained in another legislation cannot justify a further charge. Even by employing the most liberal rules of construction of machinery provisions we have not been able to support the working back of presumptive income by the Assessing Officer and then its subject to charge of Workers' Welfare Fund. The provisions of section 4 of Workers' Welfare Fund lay out the stage at which the levy of the fund has to be made. It is firstly at the time of filing of a return and in case of any change in the income returned and the income assessed, at the time when the income is assessed although subsection (4) of section 4 further contemplates that an order for levy of fund can be made after an assessment has been framed yet the reference still remains to the framing of an assessment. There is no other incident or stage to which the levy of the fund can be linked. In order to grant the prayer of the Revenue not only this Court will have to lay down a rule which would amount to legislate but also a number of lacunas will have to be supplied. The charging provisions of section 4 of Workers' Welfare Fund Ordinance and those of presumptive tax regime under section 80CC to our mind cannot be reconciled or be interpreted in a way to justify a charge. The charge as noted earlier necessarily bears a reference to and follows pattern of a regular assessment framed on observation of usual formalities and following computation of income keeping in view the different provisions of the Income Tax Ordinance. Since that does not happen in cases covered by section 80CC, the charge and computation of Fund in such cases is neither legally justified nor otherwise possible. The charging provisions of section 4 of Workers' Welfare Fund Ordinance are clear that the Legislature intended the charge on the real income of an industrial concern. There is nothing in these provisions which can possibly be extended, enlarged or stretched to hold that the levy was contemplated on presumptive income as well.

22. As far the objection against the maintainability of appeal before the Commissioner (Appeals) is concerned that issue cannot be taken up at this stage. There is a lot of weight in the contention that the Fund being a juristic person the Commissioner of Income-tax merely being an agent to collect the same could not independently maintain an action before these forums. However, no such objection was overtaken at earlier stages, nor the question as framed was otherwise objected to by the assessees. Therefore, the issue with regard to maintainability of appeals by the Revenue before the forums below cannot be taken up at this stage. The appellate jurisdiction of this Court under section 136(1) of the Income Tax Ordinance, 1979 (since amended) is confined to a question of law arising out of an order of the Tribunal. The Tribunal having framed a question for our consideration without an objection from the assessees, we cannot take up the same for a decision.

23. Accordingly for what has been said above, our answer to question stated in para. 7 an is in the affirmative to the effect that an industrial establishment covered by provisions of section 80CC of the Income Tax Ordinance, 1979 is not liable to the charge of the fund contemplated in section 4 of the Workers' Welfare Fund Ordinance, 1971.

M.B.A./C-165/L Reference answered.